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LONDON transport chiefs are to have their pay frozen and their bonuses slashed on the orders of the Mayor Boris Johnson.
Transport for London Commissioner Peter Hendy will see no increase in his annual base salary of around £340,000 this year and has also been told that his annual bonus must be cut from a potential £170,000 to a maximum of £75,000.
This is substantially less than Mr Hendy has previously received. In 2006/7, the last year for which figures are available, he was paid a bonus of £115,000. The pay freeze will also cost him around £10,000 that he expected to receive as an inflation-related increase on his base salary.
TfL today insisted it accepted the cuts and would formally propose them to the board this month.
The bonus paid to Tim O'Toole, outgoing managing director of the Underground, has been cut from a potential £130,000 to a maximum of £70,000. The bonuses for all other senior TfL directors are capped at £50,000 - in most cases less than they previously received. The actual amounts of each manager's bonus will be decided by a TfL remuneration committee up to the City Hall-imposed cap.
City Hall sources said the cuts were necessary to reflect the growing strain on TfL's finances in the recession. The organisation is faced with falling passenger revenues along with growing demands for huge capital spending on projects such as Crossrail.
The Standard has learned TfL's overall bonus budget for the financial year 2008/9 was to have been £12.6 million - of which almost half, £5.7 million, was to have been allocated to a few dozen senior managers.
The rest was to have been shared among TfL's other staff, with around 13,000 operational employees, such as train drivers and ticket collectors, getting bonuses of £500 each and 6,000 junior managers and administrative staff sharing a bonus pot of about £300,000.
The bonuses for the junior ranks will remain but the value of the senior bonus scheme will be cut by around £1 million, with the biggest cuts coming at the top end of the pay scale. The cuts come amid growing controversy about TfL's large number of highly-paid senior staff.
Freedom of Information requests by the Standard revealed that in 2007/8,123 TfL managers earned more than £100,000 a year.
The average salary of TfL's six-figure managers is higher than the Mayor's. Fifteen TfL bosses, including the director of marketing, earn more than the Prime Minister. Only 16 of the 123 top earners, however, were directly involved in operating bus and train services.
TfL has pledged to cut costs by a total of about £250 million a year over the next nine years but Mr Hendy recently said the target was proving "challenging."
A TfL spokesman said: "Proposals to freeze senior pay and bonuses will be considered by the TfL board's remuneration committee."
Reader views (28)
tfl is grossly incompetent and wasteful. needs most of board sacked and salaries should be half of current level and no bonuses
- Terry Sullivan, morden surrey england
Charlie C - I was a school child in Finsbury, central london when the great winter of 1962/63 happened and buses still ran though a winter that lasted 3 months!!
The fact is cost cutting over the years now means than when something happens we are not prepared. In those days we had containers with grit on main roads all year round ready for when needed. As for the buses they were then controlled by London Transport and therefore plans were always in place for events like snow or fog etc..
This has fallen apart since privatisation and while Boris cannot be held fully to blaim as Ken had 4 years to put things in place,nevertheless Boris on becoming Mayor should have found out what procedures were in place (its called learning the job!) he has chosen not to do this and his total failure to answer questions on this subject show he is unfit to control a City like London.
The real test will come next time it snows which could be only 8 months time!!
- Melvyn Windebank, Canvey Island, Essex
Melvyn I can see why you are upset but you have to face realities. It is impossible for a city like London to gear up for heavy snow every 10 years or so. If Boris were to suggest that we now spend millions buying snowplows and spend hundreds of thousands every year in their up keep when they may never get used you would be the first person to complain about the waste.
As far as the supposed do nothing policy that is Labour spin and lies as you well know because they have employed a do anything policy which most of the time has involved throwing petrol on the flames. Sometimes a thinking process has to be involved. We are pretty much where they put us in the late 70s with the unthinking borrow, spend, tax cycle.
- Charlie C, london
Well Boris has to find the millions of pounds being wasted on the extra cost of running 3 Artic routes with 50% extra buses (e.g Route 38 now 47 Artics becomes 72 MODERN Double-Deckers) oddly route 38 only needed 50 Routemasters!! As for the two red arrow routes these are best suited to artic buses and yet Boris is replacing them with long fixed single seck buses a type which used to get stuck turning corners! (fun and games to come).
I reckon it time for TFL chiefs to stand up to Boris and simply resign en-masse and leave him to select his own team that way their links to the Ken will no longer be able to be used for the disaster that is SNOWGO BOGO who sees snow and goes to bed! The fact millions were unable to travel in London that day was not his fault?
And I thought the Mayor had a duty to see things worked when potential disaster strikes be it man-made or act of god.
All Boris did is behave like an over grown public school twit and walk out when questioned about his lack of action. Wonder how many millions of pounds did this cost to the London economy and why now he has admitted following the Tory party "DO NOTHING" policy why employers (including private bus companies) have not sued the Mayor for loss of earning.
After all Porche made a nice little earner against Ken with its legal action re low emissions even though a Mayoral election was due to be held!
As for moaning about £4 fares then get OYSTERISED and deny Boris the extra funding!
- Melvyn Windebank, Canvey Island, Essex
Must be tough to live on 340,000, I guess the extra 75,000 bonus makes life just about bearable. Ridiculous!
- Elliot, London
Get rid of the TFL and put somebody in charge on a reasonable salary!
- Mark A, Warrington England
In response to Bert of London's post:
Have I missed a point here, why do the train drivers & ticket staff get bonuses, they make our lives a misery by striking when they fancy. They get great pension schemes, free travel & more paid holiday then just about anybody else. Why don’t bosses tell staff if you have been on strike you won’t get any bonuses…!!!
Instead of being jealous of their beneifits, try to be more constructive! If you company doesn't offer you a decent concession along with your job then you must take that up with your employer. Try asking why the tube is so over budget and falling behind in the Tube Improvement Works?
How about having to take on the company formerly known as Metronet and Silverlink on their books because of the abject failure that was the PPP.
How about tube staff returning straight to work after incidents like 7/7. Where was their recognition then for putting the travelling public first over worrying about their pay and conditions?
What you and most others fail to realise is most staff on TfL just want to do their jobs, not gat tarrred with the constant strike threats brush. Thats just what happens when Unions and Senior Management fail to do their jobs properley.
If working working conditions for yourself became untenable you would be doing exactly the same thing anyway. To say you would do some thing else would simply be hypocritical.
- Nigel, Sutton, Surrey
so the £4 single tube ticket price is pretty much all going to the senior managers then!? This public sector bonus culture HAS to stop! the continual rewards for failure is simply unsustainable. The Tube network is no better now than what it was when it was first constructed...stations seem to always be closed, there are delays and suspensions every 5minutes how can they possibly think they deserve a bonus. I simply dont understand how remuneration groups come up with these figures, they should be comparing the jobs these guys do to other senior officials in other countries NOT what the FTSE 100 bosses get! Do they really think that the head of marketing does a more important and stressful job than the PM!?? Common sense simply doesn't exist in the public sector anymore.
Get rid of half of them, and ALL of the platform announcers telling us to mind the doors as if anyone listens anyway - Then see how big the hole in TFL's finances are.
- Alanj, London
TFL should get on with providing cheap efficiant transport without expensive gimmicks and with no bonuses even if someday they do provide a half decent service
- Derek, Oliva,Valencia Spain (In England at present)
"Fifteen TfL bosses, including the director of marketing, earn more than the Prime Minister."
Er, I know this is a stupid question, but why does TfL need a 'director of marketing' in the first place?
It's not as if no-one has ever heard of public transport, or has a myriad of competing options in London.
"Hmmm, I was going to fly to work today on my jet-pack like normal, when I saw this wonderful advertising campaign for something called the 'London Underground'. I'd never heard of it before, but it was such a convincing advert I think I'll give it a go..."
Please.
- Anyone earning over £40k should get a pay freeze.
- Bonuses should be capped at £1k, not £50k.
- Sack half of the 123 people earning over £100k, it's not as if anyone will notice anyway. They're just people that arrange meetings and swap paper with each-other, trying to look busy and justify their own existence...
- John T, London
Have I missed a point here, why do the train drivers & ticket staff get bonuses, they make our lives a misery by striking when they fancy. They get great pension schemes, free travel & more paid holiday then just about anybody else. Why don’t bosses tell staff if you have been on strike you won’t get any bonuses…!!!
- Bert, London
Boris for PM. Now get your party to rufund the increase in my council tax.How you could allow any London council to increase council tax when nobody is getting an increase in wages I do not know.
- David, london
Sarahn is correct - your salary is your reward and your position in the organisation. TfL executives are not entrepeneurs with there own assets on the line they are wage slaves and civel servants to boot. Stop rewarding yourself and hand in the credit Tfl cards.
- Mr Pastry, Brisbane Australia
Get rid of all the Fat Cats, or put them on normal wages, like the rest of us.
- Mark Burton, St Ives Cambs
No wonder it is so expensive to travel on public transport!
There is a better service on the tube .ie. less delays, because some lines only run 5 days a week! THe whole system is shabby and that is why I walk to work...
- Charles Smith, London
He already gets a bonus - we call it a salary.
My idea of a bonus is: do your work and you get to stay in your job. Anything else is a joke.
- Sarahn, London, UK
Is Boris cutting his own salary or just those of his staff? Surely, what is good for the goose...
- Stephen Markham, London, UK
Well done Boris!
Thank goodness someone has the guts to sort out this atrocious mess created by the communist-influenced former London Mayor and current incredibly useless Labour Government.
Maybe if we are lucky the media might even pluck up the courage to tell the Labour Government just how useless they are! But then of course they will worry about their Government paid advertising revenue.
- Joe, Thornton Hetah, UK
As a just about to retire civil engineer who has worked internationally, I suggest Mr Hendy should re-visit his decision to outsource the programme management of CrossRail.
Awarding a £100m contract to a consortium who cannot take on client risk on behalf of us the hard-pressed taxpayer, even if they wanted to, is costing the taxpayer c£60-70m too much in unnecessary fees when CrossRail should be recruiting a smaller team in house over the 8 years of the project when good staff are readily available in the current recession/depression.
Mr Hendy and the TfL Board should look at how countries like Spain and France client manage effectively in-house their mega projects at much less cost to their taxpayers than we do. Perhaps another example, like our banking system, of a flawed anglo saxon management model?
- Mike, london
Is Boris cutting his own salary?
- Stephen Markham, London, UK
If Mr Hendy is serious about cutting TfL spending by £250mpa, he could start by revisiting Crossrails decision to spend £2m+ on land in Gidea Park for railway sidings, when they could easily be located at Ilford Depot for no extra cost.
How many more examples are there like this? Public money being wasted on a mind-boggling scale within the Crossrail project.
- Bill Batchelor, london, england
Boris is showing the government the way! When the squeeze on public finances is so tight then there have to be sacrifices at the top.
There's loads of fat to be trimmed from the public sector budgets. The NHS has more non-clinical than clincal staff for example. Some of them obviously do a useful job, but many are public sector "fat cats" on the gravy train...
- Alex, London, UK
"Peter Hendy will see no increase in his annual base salary of around £340,000... he was paid a bonus of £115,000"
You are kidding right? He's been paid nearly half a million a year to do what exactly? I've yet to notice any sort of improvement on public transport, maybe the improvements are all internal, I hear that the marble bathrooms in both TFL buildings are great.
- Bob, Cheam
If the is not there (which it is not), you cant pay these bonus levels - simple.
- Jeremy E, London
Not only should the ridiculous bonus system be scrapped but the numbers of senior managers can be significantly cut. Nobody else will notice the difference.
- Brian Denton, London
What were they getting bonuses for in the first place,everybody who uses public transport will tell you the service is terrible.How they think they will cope with the olympics I have no idea,they cant run the transport on time now,with a million more people it can only get worse.
- David, london
Too many chiefs and too many indians.
Which departments are responsible for making savings and reducing fares and Taxpayer subsidies ?
None ?
- Cap, london
A good start to saving some Taxpayer cash.
Can we continue by not renewing any employer contracts when they terminate, and 'letting go' those who don't achieve their targets ?
- Cap, london
